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Bitcoin is showing signs of strength even after reaching new all-time highs, and a major correction seems unlikely, according to a recent analysis from crypto investment firm 21Shares.
Strong Demand Meets Falling Supply
Matt Mena, a crypto research strategist at 21Shares, explained that a “structural imbalance” is building in Bitcoin’s market. This refers to growing demand for Bitcoin while available supply is shrinking.
Mena said the supply of Bitcoin on exchanges and over-the-counter (OTC) desks is at an all-time low, even as interest from institutional and long-term holders continues to rise.
“There are far more positives than negatives right now,” Mena told Cointelegraph, adding that this supply-demand gap makes a prolonged Bitcoin correction increasingly unlikely.
BTC Hits New Highs Without Retail FOMO
Bitcoin hit a new all-time high of $122,884 on Monday. This follows a recent surge past $111,970 on July 9. Despite the price jump, retail investors seem to be sitting out of the rally for now.
André Dragosch, head of research at Bitwise, pointed out that Google search interest for “Bitcoin” remains low, suggesting that most of the buying activity is coming from institutional players and not retail investors.
“Bitcoin is at new all-time highs, but retail is almost nowhere to be found,” Dragosch noted.
This absence of retail speculation may actually help support the price stability, as the current rally appears to be driven by long-term and price-agnostic investors.
Bitcoin ETFs Absorb New Supply
Mena also highlighted that U.S.-listed Bitcoin ETFs have absorbed multiple times more Bitcoin than miners can produce this year. This means that newly mined BTC is not enough to meet the demand created by institutional products alone.
“And that doesn’t even include corporate treasury buyers, who continue to accumulate quietly,” he added.
This aggressive demand from ETFs and corporations is tightening the available supply further and creating conditions that support higher prices in the near future.
Risks Still Exist
Although the fundamentals look strong, Mena cautioned that Bitcoin is still vulnerable to macroeconomic risks. He pointed to two key concerns:
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Potential U.S. Tariffs: If Donald Trump’s proposed tariffs are more aggressive than expected, markets may react negatively, affecting Bitcoin and other risk assets.
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Federal Reserve Policy: If Fed Chair Jerome Powell suggests that interest rate cuts will be delayed, this could also impact Bitcoin’s momentum in the short term.
So while a deep Bitcoin correction may be unlikely, some pullbacks or short-term consolidation cannot be ruled out, especially if macro headwinds strengthen.
Market Seasonality Favors Later Gains
One surprising detail is that Bitcoin is hitting all-time highs during what is typically a weak time of year. Mena noted that Bitcoin has historically underperformed in the third quarter, averaging only a 6.32% return since 2013, according to data from CoinGlass.
“It’s remarkable that Bitcoin is setting new all-time highs during the most illiquid, seasonally weak part of the year,” Mena said.
21Shares expects market momentum to resume once summer ends, as liquidity returns and investor activity picks up in the fall. They forecast that an extended price decline over the next six months is unlikely.
Bitcoin Outlook Remains Bullish
As of the time of writing, Bitcoin is trading at around $117,804, according to CoinMarketCap. The cryptocurrency is up 11.62% in the past 30 days, continuing its upward trend.
The overall sentiment remains bullish among analysts and institutional investors. The combination of low supply, strong ETF inflows, and ongoing accumulation by corporate treasuries supports the view that Bitcoin will likely remain stable or move higher in the months ahead.
Although some short-term volatility may occur, the larger picture for Bitcoin is positive, according to 21Shares. As demand outpaces supply, Bitcoin is positioned to maintain its upward trajectory and could continue reaching new highs as 2025 progresses.
